Opinion
No. 247 C.D. 2012
08-22-2012
Kinard Entertainment, Inc. v. Pennsylvania Liquor Control Board, Appellant
BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, Judge HONORABLE RENÉE COHN JUBELIRER, Judge HONORABLE ANNE E. COVEY, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY JUDGE COVEY
The Pennsylvania Liquor Control Board (PLCB) appeals from the York County Court of Common Pleas' (trial court) January 25, 2012 order directing conditional renewal of Kinard Entertainment, Inc.'s (Kinard) Hotel Liquor License No. H-292 (License). The sole issue for this Court's review is whether there was substantial evidence to support the trial court's order. We affirm.
Kinard has held the License for premises located at 466-468 East Market Street in York since March 1999. On February 23, 2010, Kinard filed an application to renew the License for the renewal period beginning March 1, 2010 and ending February 29, 2012. By February 26, 2010 letter, the PLCB's Bureau of Licensing (Licensing) notified Kinard that its preliminary review of its citation history and operation indicated an abuse of its licensing privilege, and that a hearing would be held to determine whether the license should be renewed. By June 9, 2010 letter, Licensing informed Kinard that the hearing would be held on June 21, 2010 relative to the following objections:
Liquor licenses are renewed every two years. Section 3.2(a) of the PLCB's Regulations, 40 Pa. Code § 3.2(a).
1. It is alleged that you have abused your licensing privilege and, pursuant to Section 470 of the Liquor Code (47 P.S. Section 4-470), you may no longer be eligible to hold a license based upon:
a) Violations of the Liquor Code relative to Citation Numbers: 10-0637, 10-0181, 08-1639[X], 07-2721, 06-1578 and 00-1162.
b) The improper conduct of your licensed establishment as there have been approximately twelve (12) incidents of disturbances at or immediately adjacent to your licensed establishment during the time period March 2008 to present reported to the York City Police Department. This activity includes but is not limited to a robbery, shootings and fights.
Reproduced Record (R.R.) at 358a-359a.
2. The Bureau of Licensing has rejected the late-filed renewal application pursuant to Section 470(a) of the Liquor Code (47 P.S. Section 4-470(a)).
Act of April 12, 1951, P.L. 90, as amended, 47 P.S. §§ 1-101 - 10-1001.
Section 470(a) of the Liquor Code requires renewal applications to be filed at least 60 days before the license expires. Thus, Kinard's application to renew its license filed on February 23, 2010 should have been filed by January 2, 2010. See R.R. at 397a.
After being postponed, a PLCB hearing examiner ultimately held a hearing on November 19, 2010. The hearing examiner found reasonable cause for the late filing of the renewal application, and recommended that the PLCB renew the License, subject to a conditional licensing agreement since Kinard's operating history indicated an abuse of its licensing privilege. On March 16, 2011, the PLCB issued an order refusing to renew the License. In its opinion, the PLCB stated that Kinard had abused its licensing privilege in that it had incurred 6 citations, there were 8 incidents of disturbance at or near the premises between March 2008 and October 2009, and there was no evidence of substantial corrective measures taken by Kinard. Kinard appealed to the trial court.
The trial court held a de novo hearing on January 6, 2012, at which the PLCB entered the record of the proceedings before the hearing examiner and the PLCB's license refusal, and Kinard offered the testimony of its principal, Darren Kinard (Mr. Kinard), and its manager, Derrick Matias (Mr. Matias). By January 25, 2012 order, the trial court ordered renewal of the License, subject to the following conditions:
1. [Kinard] maintain at least nine (9) security personnel including one (1) female within and without the immediate area of the establishment;R.R. at 14a. The PLCB appealed to this Court.
2. Maintain a dress code;
3. Maintain metal detection device;
4. Maintain scan/I.D. checker;
5. Maintain security cameras both for the interior and exterior of the premises;
6. Comply with noise limitations;
7. Maintain barred patron list easily accessible to the security personnel.
The appeal resulted in an automatic supersedeas pursuant to Pa.R.A.P. 1736(b). Kinard filed a motion to eliminate the automatic supersedeas, which was granted by the trial court over the PLCB's objection. On May 3, 2012, the PLCB filed a petition for reinstatement of supersedeas, which was denied by this Court's May 18, 2012 order. "This Court's scope of review in a liquor license renewal case is limited to determining whether the trial court's findings of fact are supported by substantial evidence and whether the trial court committed an error of law or abused its discretion." Goodfellas, Inc. v. Pennsylvania Liquor Control Bd., 921 A.2d 559, 564 n.8 (Pa. Cmwlth. 2007). "Substantial evidence is relevant evidence that a reasonable mind might consider adequate to support a conclusion." First Ward Republican Club of Phila. v. Pennsylvania Liquor Control Bd., 11 A.3d 38, 43 n.9 (Pa. Cmwlth. 2010).
The PLCB argues that the trial court's findings were not based upon substantial evidence or consistent with the law. The PLCB specifically contends that despite measures purportedly in place between 2007 and the time of this renewal, there was a pattern of illegal activity at or near the licensed premises about which Kinard knew or should have known, but failed to take substantial steps to correct. We disagree.
Section 104(a) of the Liquor Code, 47 P.S. § 1-104(a), grants the PLCB broad police powers "for the protection of the public welfare, health, peace and morals of the people of the Commonwealth and to prohibit forever the open saloon . . . ." It further provides that "all of the provisions of [the Liquor Code] shall be liberally construed for the accomplishment of this purpose." Id. Therefore, "renewal of a liquor license is not automatic." First Ward Republican Club of Phila. v. Pennsylvania Liquor Control Bd., 11 A.3d 38, 43 (Pa. Cmwlth. 2010). Section 470(a.1) of the Liquor Code, 47 P.S. § 4-470(a.1), provides in pertinent part:
Added by Section 17 of the Act of December 9, 2002, P.L. 1653.
The Director of the Bureau of Licensing may object to and the [PLCB] may refuse a properly filed license [renewal] application:
(1) if the licensee, its shareholders, directors, officers, association members, servants, agents or employes have violated any of the laws of this Commonwealth or any of the regulations of the [PLCB];
(2) if the licensee, its shareholders, directors, officers, association members, servants, agents or employes have one or more adjudicated citations under this or any other license issued by the [PLCB] . . . ;
. . . . or
(4) due to the manner in which this . . . licensed premises was operated while the licensee, its shareholders, directors, officers, association members, servants, agents or employes
were involved with that license. When considering the manner in which this . . . licensed premises was being operated, the [PLCB] may consider activity that occurred on or about the licensed premises or in areas under the licensee's control if the activity occurred when the premises was open for operation and if there was a relationship between the activity outside the premises and the manner in which the licensed premises was operated. The [PLCB] may take into consideration whether any substantial steps were taken to address the activity occurring on or about the premises.(Emphasis added).
It is clear that a licensee is strictly liable for violations of the Liquor Code, and even a single violation thereof may be sufficient to support the PLCB's refusal of a license renewal application. Hyland Enters., Inc. v. Pennsylvania Liquor Control Bd., 631 A.2d 789 (Pa. Cmwlth. 1993). In addition, pursuant to Section 470(a.1) of the Liquor Code, a licensee may be held accountable for non-Liquor Code violations, if it can be established that there was a pattern of illegal activity on the licensed premises about which the licensee knew or should have known, and the licensee failed to take substantial steps to prevent such activity. Pennsylvania Liquor Control Bd. v. TLK, Inc., t/a Peter P's, 518 Pa. 500, 544 A.2d 931 (1988). A trial court reviewing a decision of the PLCB not to renew a liquor license hears the matter de novo, and may sustain, alter, modify or amend the PLCB's order even when it is based upon the same evidence presented before the PLCB. Section 464 of the Liquor Code, 47 P.S. § 4-464; U.S.A. Deli, Inc. v. Pennsylvania Liquor Control Bd., 909 A.2d 24 (Pa. Cmwlth. 2006).
In this case, the trial court reviewed the record from the PLCB, including Kinard's citation history. Relative to Citation No. 00-1162, Kinard admitted furnishing alcohol to a visibly intoxicated patron on April 15, 2000, in violation of Section 493(1) of the Liquor Code, 47 P.S. § 4-493(1). Concerning Citation No. 06-1578, Kinard admitted allowing a 19-year-old to frequent its premises and furnishing the minor alcohol on more than one occasion between January 1 and February 12, 2006, in violation of Section 493(1) and (14) of the Liquor Code, 47 P.S. § 4-493(1), (14). With respect to Citation No. 07-2721, Kinard again admitted furnishing alcohol to a visibly intoxicated patron on August 9, 2007. Regarding Citation No. 08-1639X, Kinard admitted issuing a bad check to purchase alcohol on May 27, 2008, in violation of Section 493(26) of the Liquor Code, 47 P.S. § 4-493(26). Concerning Citation No. 10-0181, Kinard admitted allowing music to be heard outside the licensed premises on June 21, September 26 and December 5, 2009, in violation of Section 5.32(a) of the PLCB's Regulations, 40 Pa. Code § 5.32(a). Finally, with respect to Citation No. 10-0637, Kinard admitted operating without a valid health permit between January 1 through 3 and January 6 through 10, 2010, in violation of Section 437 of the Liquor Code, 47 P.S. § 4-437.
The trial court also reviewed York City Police Officer Michael Meeker's testimony that, on September 15, 2009, at approximately 12:30 a.m., he and Officer Schick responded to a report of shots fired in the area of Kinard's premises. When the officers arrived Khaliq Mutazz (Mutazz) was in Kinard's parking lot. The officers ordered Mutazz to show his hands, and Mutazz turned and ran through a gate at the rear of Kinard's property. After officers detained Mutazz, they discovered a loaded .40 caliber pistol approximately 10 feet from the gate. The ammunition matched the shells officers recovered in the breezeway immediately to the east of Kinard's premises. According to Mutazz's statement, he and another male had an altercation in the breezeway. When the other male pulled a gun, Mutazz wrestled it from him, fired three shots over his head, and threw the gun.
Officer Meeker also testified that, on October 18, 2009, he was dispatched to Kinard's premises for the shooting of Shi-Love Caprice Williams (Williams) and Kevin O'Neal-Thomas. When he arrived, Williams was exiting the bar with two gunshot wounds in her right thigh. Inside, Officer Meeker observed blood, detected the aroma of marijuana, and saw empty plastic baggies, generally used to store narcotics, scattered throughout the premises.
Mr. Kinard testified before the trial court that the bar is located in a financially depressed area he deemed "the wild west." R.R. at 52a. He explained that since the country began having issues in 2007 and 2008, the neighborhood has really gotten out of hand, and he was having a harder time maintaining a safe environment. After a meeting with a Liquor Control Enforcement officer following the incident for which he was cited in 2006, Mr. Kinard obtained certification from the PLCB's responsible alcohol management program. He added 8 security cameras (6 inside, 2 outside - one in front and one on the side), and a system that recorded their footage. Mr. Kinard also hired females to conduct pat-downs and bathroom checks. He started using metal detection wands and an electronic I.D. checker. He changed the music and "cut away anything that had violent tones." R.R. at 59a. He also established a dress code, which he posted on the wall along with its zero-tolerance drug policy. Kinard also maintains on the premises a list of barred patrons. All of these steps were taken before 2008.
Mr. Kinard further testified that, at some point in 2009, Kinard's again began playing dance music in order to attract patrons and increase business. However, following the October 2009 shooting, he closed the premises for "the first couple months," then re-opened only during the week without offering any entertainment at the premises. He also stopped selling alcohol at midnight, rather than at 2:00 a.m. Since that time, he has experienced a loss of income from the business. In 2010, after hiring a new manager, Mr. Kinard changed the business entirely, making it a Caribbean sports bar. Mr. Kinard testified that since the format change, Kinard's has not experienced the problems it had before.
Mr. Matias testified that he was the manager of Kinard's from 2007 until the summer of 2008, then again beginning in 2011. He recalled that the meeting between Mr. Kinard and the enforcement officers occurred in September 2007. Thereafter, Mr. Kinard implemented a dress code, changed the music, and began using an I.D. checker.
The trial court held that although "the evidence was less than precise as to the timing of corrective measures taken by [Kinard], we are satisfied that [Kinard] did implement all suggestions and recommendations made by [the Bureau of Liquor Control Enforcement]." R.R. at 19a-20a. The trial court was "impressed with the corrective measures taken by [Kinard], particularly in response to recommendations and suggestions made by the [Bureau of Liquor Control Enforcement]." R.R. at 19a. This Court has held:
The licensee may defend against the suspension of a liquor license by demonstrating that he took substantial affirmative steps to guard against known pervasive illegal activities. Remedial measures must be taken at a time when the licensed establishment knows or should know that illicit activity is occurring on the premises. While TLK was an enforcement case, the standard enunciated therein is applicable in license renewal cases. Moreover, the trial court may consider corrective measures taken by a licensee in response to adjudicated citations, not just a pattern of illicit, criminal behavior, to determine whether those corrective measures warrant renewal of a liquor license.I.B.P.O.E. of W. Mount Vernon Lodge 151 v. Pennsylvania Liquor Control Bd., 969 A.2d 642, 649 (Pa. Cmwlth. 2009) (citations omitted). Here, the trial court determined that Kinard's corrective steps warranted renewal of the License, subject to its designated conditions. Because there is substantial evidence to support the trial court's order, we will not disturb it.
This Court notes that Officer Meeker also presented 6 reports of incidents occurring on or near Kinard's premises on April 11, 2008 (patron struck with a beer bottle inside Kinard's premises), August 21, 2008 (patrons fought outside the premises), September 19, 2008 (two incidents: patron was robbed, and another was assaulted outside the premises), May 1, 2009 (people fighting outside the premises), and September 15, 2009 (in addition to the shots fired incident, a patron was found in possession of drugs upon exiting Kinard's premises). Officer Meeker testified that, although these reports contain information transmitted from those with knowledge of the occurrences near the time of the events, and were created and kept in the course of the York City Police Department's regularly-conducted business, he did not assist in their preparation, nor is he the official record custodian.
The PLCB entered a total of 8 police incident reports, however, 2 related to the September 15, 2009 and October 18, 2009 gun incidents about which Officer Meeker offered first-hand testimony. Because the PLCB argued that those reports support its position, and because the trial court may have relied on them, we are constrained to address their admissibility. --------
This Court has held that police incident reports introduced at a PLCB hearing are not admissible under official records exception to the hearsay rule under Sections 6103 and 6104 of the Judicial Code, 42 Pa.C.S. §§ 6103, 6104, if the proffering officer does not attest to the official copy, or provide a certificate verifying that he has custody of the original. First Ward Republican Club of Phila. The police incident reports are also inadmissible under the business record exception to the hearsay rule set forth in Section 6108 of the Judicial Code, 42 Pa.C.S. § 6108, if the proffering officer was not the officer who responded to the events described therein, he was not responsible for preparing or reviewing the information contained in them, and neither he nor a subordinate was responsible for maintaining them. Id.
Based upon this record, the 6 police incident reports about which Officer Meeker did not have first-hand knowledge, were inadmissible as hearsay and should not have been considered relative to Kinard's renewal application. However, the hearing examiner accepted and considered the reports offered by Officer Meeker despite Kinard's hearsay objections. See R.R. at 250a-254a, 368a-375a, 390a-392a. The PLCB's opinion makes clear that it also considered the reports. See R.R. at 193a-196a, 207a-209a. At the trial court's de novo hearing, Kinard again objected to admission of these police incident reports. See R.R. at 3a-48a. The trial court admitted them subject to its research of their admissibility. See R.R. at 47a-48a. In its opinion, the trial court did not specifically rely upon the 6 police incident reports, but states, "we need not detail the troubled history with [Kinard] but do refer to the particular findings set forth in the opinion and recommendation of the [PLCB] based on the findings of the [h]earing [e]xaminer . . . ." R.R. at 19a. To the extent that the trial court's opinion is based upon the 6 police incident reports, it was in error. However, since there was substantial evidence to support the trial court's order without these reports, any such error did not affect the outcome and would, therefore, be harmless. See Knowles v. Levan, 15 A.3d 504 (Pa. Super. 2011).
For all of the above reasons, the trial court's order is affirmed.
/s/_________
ANNE E. COVEY, Judge
ORDER
AND NOW, this 22nd day of August, 2012, the York County Court of Common Pleas' January 25, 2012 order is affirmed.
/s/_________
ANNE E. COVEY, Judge